Ten Questions to Ask your Prospective Lender
Ask prospective lenders these questions to help ensure you make the best choice:
- Interest Rate – How much is it? Fixed or variable? When does interest capitalize and how often?
- Loan Amount – Is there a maximum? Can I borrow more than the cost of my education? Can I use the loan to pay off a prior year’s balance owed to my school?
- Co-signers – Is a co-signer required? Is there a co-signer release process? Will having a co-signer lower the interest rate?
- Fees – Is there an application fee? Are there any disbursement fees? Are there any repayment fees?
- Disbursement – Is the loan check payable to me or the school? How long does it take to receive the funds?
- Borrower Benefits – Are there interest rate reductions that reward me for on-time payments or other actions?
- Repayment – What will my minimum payment be? When does payment begin? How long is the repayment period? Is there a prepayment penalty?
- Billing – Will I get one bill for all of my private loans? Can private loan bills be combined with federal loan bills?
- Customer Service – Whom do I call with questions about the application? Is that the number I’ll call once I’m making payments?
- Deferments – Will payments be deferred while I’m in school? If so, will interest continue to accrue?